When Crossett Corporation was organized in January, Year $1,$ it immediately issued $4,100$ shares of $$47$ par, $6$ percent, cumulative

preferred stock and $11,000$ shares of $$6$ par common stock. Its earnings history is as follows: Year $1,$ net loss of $$17,000$; Year $2,$ net

income of $$124,000$; Year $3,$ net income of $$217,000.$ The corporation did not pay a dividend in Year $1.$

Required

a$.$ How much is the dividend arrearage as of January $1,$ Year $2?$

b$.$ Assume that the board of directors declares a $$53,500$ cash dividend at the end of Year $2($remember that the Year $1$ and Year $2$

preferred dividends are due$).$ How will the dividend be divided between the preferred and common stockholders?

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

Assume that the board of directors declares a $$53,500$ cash dividend at the end of Year $2($remember that the Year $1$ and Year

$2$ preferred dividends are due$).$ How will the dividend be divided between the preferred and common stockholders?